ESG Update March 2021

Marshalls Brand Manifesto

We all need places that make us feel happier, safer and more sociable.

At Marshalls we believe that it's our responsibility to help shape these places - creating spaces that give people the freedom to work, play, create and grow. Spaces that enhance people's lives - because the better our environment, the better we can be.

Everything we do is intended to make the world around us a better place to live in.

Our team not only takes pride in choosing the best, most ethically sourced materials, we also believe we have a duty to behave as sustainably and as socially responsibly as possible: consciously doing good for the society, environment and planet that we share.

It's not enough that every product is designed, manufactured and tested to market-leading standards.

If we are to truly care about the impact we have on society, we have to make the conscious choice to always do the right things, for the right reasons, in the right way.

We call this The Marshalls Way. We are guided in this by our values of leadership,

excellence, trust and by being sustainable in everything we do.

In staying true to our beliefs we can meet both the high standards we set ourselves - and the highest expectations of our customers, our industry, our business peers and society as a whole.

Yes, our technical expertise, manufacturing capabilities and creative vision helps us fulfil the ambitions of architects, town planners, civil engineers, new housebuilders, builders merchants, landscapers and homeowners across the world. But our intent and our actions will define us as a business, as a brand and as individuals.

Working together, we can influence the design of the places our products transform and the spaces we share, making communities safer, more sustainable, more resilient - and adding real social value.

That is our commitment. That is what sets us apart.



We have eradicated child labour from Tier 1 of our

Indian Sandstone supply chain – this is really important to us

and our commitment to respecting human rights is

central to our business

We’re upgrading all of our fleet to Euro 6 standards –this means we’re limiting

exhaust of harmful pollutants and improving

fuel economy

SBTi targets to reduce Scope 1 and 2

greenhouse gas emissions 40% per tonne of

production by 2030

30% total reduction in carbon in the last 5 years and over 50% since 2008

All our production plants now use 100%

renewable energy

100% of employees are paid at, or above,

the Living Wage Foundation level

Plastic consumption down by over 30%

We have been product carbon labelling

information on our domestic and commercial products since 2008 and

these have been approved by the Carbon

Trust using PAS2050

In the last 5 years, our permeable paving has

prevented 322,000m³ of flood water, equivalent to 192 Olympic swimming pools

Over 96% of our manufactured products are made in mainland UK and we’re proud to pay our fair

share of tax – we’ve kept the Fair Tax Mark since 2015

100% of natural stone products now

have Ethical Risk Index scores

60% cement replacement in

block paving

100% of our concrete and natural stone products are fully

recyclableWe were one of the first

companies to achieve BES6001 accreditation for

responsible sourcing of construction products and BES6002 for ethical labour sourcing and we continue

to gain re-certification

Our concrete bricks produce 28% less carbon in

manufacture than clay bricks. Over their lifetime,

this increases to almost 50% carbon saving

We launched the highly regarded Power of

Logistics programme to tackle Modern Slavery and led the sector in tackling

the issue in the UK

Fast Facts

Part of the Marshalls DNA: how our sustainability journey started over 20 years ago

2000 ISO14001 for environmental management, launch of Marshalls’ Register of Accredited Landscape Contractors and Driveway Installers

2004 Carbon Reporting started2006 Joined the Ethical Trading Initiative (ETI)2008 Product Carbon footprinting started2009 Signatories of the UN Global Compact2010 First Disclosure to Carbon Disclosure Project (CDP)2011 Responsible Sourcing BES6001 2012 Chris Harrop named as Business in the Community Game Changer for Sustainability2014 Living Wage Foundation2015 Fair Tax Mark Accreditation2016 Made in Britain Membership, joined UNGC UK Modern Slavery Working Group, Corporate Social

Responsibility Award at PLC Awards, Priora wins Flood Mitigation Product of the Year at the Flood Expo2017 First organisation worldwide to achieve Ethical Labour Standard BES60022018 Partnership with Bright Future, Elaine Mitchel-Hill named one of Top 100 CSR Influence Leaders globally2019 Signatories of Social Mobility Pledge, Superbrand status for 10 years running, Chris Harrop receives OBE

for services to the prevention of modern slavery and exploitation2020 SBTi Approved Carbon Reduction plan 2021 Commitment to Women’s Empowerment Principles (WEPs)



ESG ratings overview Marshalls’ commitments Materiality – drivers and risk mapping ESG – vision, mission, purpose & strategy Environmental – corporate and products Social – corporate and products Governance – corporate and products Validation Who to contact


Agency Current score (Feb 21) Next score due

MSCI AAA (Leadership)

Q2 21(due to changes in methodology)

FTSE4GOOD 3.1 out of 5 Q1 21

CDP (Carbon Disclosure Project) B(Management)

Q4 21

ISS C(only 10% in industry)

Q4 21

Sustainalytics 52 management(50-100 is strong)23.4 risk(20-30 is medium)

Q1 22

Vigeo Eiris 72% Q4 21

EcoVadis tba Q1 21

Engagement With Ratings Agencies


Marshalls’ Commitments

2008

2020

20152009

2019 2021

2014

2015


The UN Global Compact – our framework


Stakeholders


136,000Est Victims in the UK

7,121Est Victims

via the Helpline

1,849Modern Slavery Cases Investigate

Modern slavery is a serious issue for the construction industry.

At Marshalls, we assess modern slavery risk in our supply chains, train our staff on how to spot the signs of modern slavery and take remedial action where necessary.

Labour in the Construction Sector


Consumer Behaviour Embracing SustainabilityResearch by Deloitte (undertaken pre-Covid) looks at consumer buying behaviour and shows the growing influence of sustainability.

43% of consumers are already actively choosing brands due to their environmental values.

34% of consumers are choosing brands based on their ethical credentials.

ESG Update March 2021https://www2.deloitte.com/uk/en/pages/consumer-business/articles/sustainable-consumer.html

https://www2.deloitte.com/uk/en/pages/consumer-business/articles/sustainable-consumer.html

Taxation

Research by ICM Omnibus and Fair Tax found that the number of consumers preferring to engage with a company that pays its fair share of tax continues to increase.

ESG Update March 2021ICM Omnibus, a nationally representative omnibus survey of c.2,000 adults across GB between 15 and 17 May 2020https://www.icmunlimited.com/wp-content/uploads/2020/06/2020-Fair-Tax-Mark-polling.pdf

In 2020, Marshalls use the Verisk Maplecroft system to assess risks related to climate change, at site and regional level.

Marshalls’ climate risk reporting, due in mid 2021, will identify environmental scores to enable us to mitigate climate change related risks in the UK and overseas. It will also enable us to assess the opportunities available to us to improve our processes and product offering.

Climate Change Risks

ESG Update March 2021Verisk Maplecroft environmental profiling for Marshalls plc, 2020

Ethical Risks

Country risk analysis combines political, economic, environmental and social issues with global risk data and advanced forecasting capabilities.

This enables Marshalls to anticipate strategic threats, optimise commercial opportunities and proactively manage issues before they emerge.

ESG Update March 2021Verisk Maplecroft ethical profiling for Marshalls plc, 2020

Modern Slavery Supply Chain Risk Mapping

Private Sector Leading Approach to Supply Chain Mapping: Overlaying our supply chain on global big data modern slavery and human trafficking incident platform – Traffik Analysis Hub


Materiality

Marshalls uses a materiality matrix to identify the issues that matter most to our stakeholders and that link to our strategic objectives.

In 2021, we will carry out a comprehensive review involving a number of internal and external stakeholders, including customers, staff, suppliers and partners.

Though these issues are individual and relate to different aspects of our operations, they do not stand alone – they are interconnected and interlinked and impact on one another.


ESG at Marshalls

We are guided by the UN Global Compact and its universally accepted ten principles: human rights, labour, the environment and anti-corruption. Practically, our strategy work addresses the challenges and opportunities of the Sustainable Development Goals.

Our work is underpinned by strong risk-based analysis and opportunity identification, based on international standards and is always externally validated.


Sustainable Development Goals


We’re committed to being a responsible business and are guided by the United Nations Global Compact (UNGC). This is the world’s largest corporate sustainability initiative which covers 4 key areas: Human Rights, Labour, the Environment and anti-corruption.

Our sustainability strategy is to Create Better Futures for Everyone; Socially, Environmentally and Economically.

Everything is underpinned by our Code of Conduct and the Marshalls Way.

We work towards achieving the Sustainable Development Goals (SDGs) that are appropriate to our business.

We have already reduced our Total Carbon Footprint by 50% since 2008

In 2020 we repaid all UK Government Furlough monies in full

Sustainability model


The Marshalls Way


We Always Say…

NO

NO

NO

YES

YES

YES


Climate Action & Environmental

Commitment to renewable energy

Product carbon

footprintsPermeable paving Fleet emissions

reductionQuarry

restoration

NO NO NOYES YES


50% Reduction in Carbon Since 2008Our total carbon footprint has decreased by over 50% since 2008, even with acquisitionsof CPM in 2018 and Edenhall in 2019.This is particularly seen in our relative footprint which also significantly decreased – this is the measure we use to take into account our carbon emissions relative to output.


Product Carbon Footprints – Lower Than Competitors

Domestic Saxon Paving (35mm)11kg CO2 per m²

Commercial Standard Pimple Paving (50mm) 13kg CO2 per m²

Domestic Driveline 50 Block Paving12kg CO2 per m²

Commercial Priora 80mm 20kg CO2 per m²

Marshalls have been product carbon footprinting since 2008, using the internationally recognised standard PAS2050.This allows customers to choose products against other Marshalls products, against competitor products and against substitute materials.


Science-Based Targets

Decarbonisation is a commitment that Marshalls takes seriously. By aligning greenhouse gas emission reduction targets, across all relevant scopes, with well below 2°C emissions scenarios, Marshalls is clear that positive action towards a net-zero future by 2050 makes business sense.In 2020, Marshalls has had its emissions reduction targets approved by the Science Based Targets initiative as consistent with levels required to meet the goals of the Paris Agreement.


80% Reduction in NOx Since 2005

Marshalls Fleet2005

Marshalls Fleet2021

The majority of ourfleet now complies with Euro 6 standards, which limit exhaust of harmful pollutants and improve fuel economy. Since 2005, there has been an 80% decreasein nitrous oxides emissions.We aim to have ourentire fleet compliant with Euro 6 standardsby early 2022.


Preventing Flooding

10cm of Flood Water

Marshalls’ approach enables us to create drainage systems that provide natural water quality treatment, encourage infiltration, reduce the impact of peak flows and minimise impact on local habitats of both communities and wildlife.

At any given time, the Priora systems we’ve sold since 2005 provide in excess of 618,312m³ of storage.

That’s enough surface water to fill over 247 Olympic swimming pools, or 1.87 billion cans of cola, which is held back from sewers or water courses in storm events.


Concrete Bricks and Pipes with Lower Product Carbon Footprints than Substitute Products

The environmental performance of a concrete brick is markedly different to a clay brick. In fact, 28% less carbon is produced in the manufacture of concrete brick sand over the whole lifetime of the brick its 49.1% less.Concrete pipeline systems have a lower whole life carbon footprint than plastic pipelines. For DN2100 pipes (where plastic resinis sourced from outside the EU) concrete pipelines have less than half the carbon impact.


Respecting People & Social

Modern slavery and risk mapping

Human rights due diligence

Business and human rights

strategy

NO NOYESYES

Ethical risk index


Modern Slavery: Power of LogisticsMarshalls has engaged the power of its nationwide logistics operation to help eradicate modern slavery. Training the entire logistics management team along with a bespoke training film, in-house training programme and supporting material, our logistics operations are equipped to better understand the signs of modern slavery.


Supply Chain Risk Mapping and Transparency


6th BES6002 Ethical Labour Sourcing Accreditation

The Ethical Labour Sourcing Standard, BES 6002, enables companies to demonstrate to customers, partners and other stakeholders, a company’s commitment to eliminating any possibility of trafficking or modern slavery in their supply chains.

The Standard provides a framework against which companies can examine and assess their own practices. They can then gain third-party Ethical Labour Sourcing verification from BRE Global, setting agreed objectives to demonstrate continuous improvement.


Human Rights Due Diligence

Aim: Build internal knowledge and confidence so that everyone can make good choices in support of human rights.


The Marshalls Ethical Risk Index (ERI) uses a bespoke, independently reviewed scoring framework.

Customers are given a genuine insight into the multi-dimensional ethical challenges facing stone procurers.

The aim of the ERI is to show users the potential issues, with a clear rating system to allow for more informed decision making.

Ethical Sourcing at a Product Level

ESG Update March 2021www.marshalls.co.uk/commercial/ethical-risk-index

Made to Last & Governance

Anti-briberyPaying our fair share of tax RecyclingPlastic reduction

NOYES NO YES


35% Reduction in Plastic Packaging Already

Over the last few years, we have engaged in a variety of plastic packaging reduction initiatives which have resulted in reducing plastic consumption by 35%, equating to approximately 400 tonnes. Reducing plastic packaging on our

products. Significant reduction of the thickness on

all remaining plastic packaging. Consolidation of many specifications

and pack sizes. Working with key suppliers to reduce

plastic on purchased items.


Comparative data of kg embodied carbon of Ordinary Portland Cement (OPC) against ground granulated blast furnace slag (GGBS), pulverised fuel ash (PFA), limestone powder (LSP) and our standard aggregate used.

Marshalls have been proactive and successful over the last 15 years in replacing significant volumes of Ordinary Portland Cement in our concrete products with replacement recycled materials.

Recycled Materials: Cement Replacement


Fair Tax

Fair TaxMarshalls is Fair Tax accredited. The Fair Tax Mark indicates that a company is open and transparent about its tax affairs and seeks to pay the right amount of corporation tax at the right time. It sets standards in responsible tax practice.

Furlough RepaymentMarshalls repaid the £9.4m of furlough money claimed from the UK Government during the first lockdown of 2020. We believe paying back this money is the right thing to do. Our careful management of the pandemic situation meant we were able to make this repayment and continued managing our business in a way that works best for the long-term success of Marshalls.

ESG Update March 2021ICM Omnibus, a nationally representative omnibus survey of c.2,000 adults across GB between 15 and 17 May 2020https://www.icmunlimited.com/wp-content/uploads/2020/06/2020-Fair-Tax-Mark-polling.pdf

Approved Science Based Targets for climate change Signatory to UN Global Compact Accredited to BES6001 (responsible sourcing) and BES6002 (ethical labour

sourcing) Accredited to ISO 45001 (health and safety management), ISO 14001

(environmental management), ISO 9001 (quality management) and ISO 50001:2018 (energy management) Carbon Trust standard Disclose to CDP (Carbon Disclosure Project) Fair Tax accreditation Superbrand status Real Living Wage employer Social Mobility Pledge signatory Women’s Empowerment Principles commitment Partnership with Bright Future Charity partnership with McMillan Members of Made in Britain, ETI (Ethical Trading Initiative), CIRIA

(Construction Industry Research and Information Association), UNGC UK Modern Slavery Working Group, Sustainable Concrete Forum, Logistics UK, Logistics Emissions Reduction Scheme (LERS), Mineral Products Association, Construction Products Association (CPA)

Accreditation & Validation


Our Overall Medium Term Strategic Themes

01 Embedding responsible behaviours into our supplier chains / ETI Base Code

02 Transparency: Ethical Risk Index, Fairstone product ranges to enable customer choice

03 A Find and Fix approach to modern slavery across the whole value chain

01 Social value of Marshalls plc

02 Social value of individual products and services

03 Maintenance of Fair Tax Mark and Living Wage Foundation accreditations

04 Inequality and diversity

01 Security of materials supply

02 Continued reductions in single use plastics and packaging

03 Circular economy / recycled materials and new product development

04 Value used and environmental Impact assessment

01 Mitigation: Science-based targets agreed to 1.5°C

02 Adaptation: site and new product development

03 Renewable energy: transport and factory based

04 Product carbon footprints to enable customer choice

01 Site based actions to reduce and reuse

02 Sustainable Urban Drainage products

03 Continued product development in collect, convey, clean and hold / release

04 Product water footprints to enable customer choice

ETHICAL RESPONSIBILITY, PARTICULARLY MODERN-DAY SLAVERY

SOCIAL VALUE

NATURAL CAPITAL

CLIMATE CHANGE

CLEAN WATER


Who to Contact

Chris Harrop OBEGroup Sustainability Director

[email protected]

Jo HolmesSustainability Stakeholder Lead

[email protected]


ESG Update March 2021

Documents

Transcript of ESG Update March 2021